Chancellor To Unveil Financial Support For Small Businesses

Fri, 21 Nov 2008

The UK Chancellor Alistair Darling will unveil a raft of new measures next week to help support ailing small businesses overcome the tough economic climate.

According to the Financial Times, Mr Darling will help small firms gain finance and insurance by underwriting new loans to small organisations and extending taxpayer guarantees for bank lending to growing enterprises, so that credit risk is reduced.

The Chancellor is also expected to announce an increase in funding for a scheme that is targeted at helping small firms apply for bank loans that carry a 75 per cent taxpayer guarantee, the FT added.

The Federation of Small Business (FSB) said wider access to an existing £360 million small firms loan guarantee scheme would be "massively helpful".

Prime Minister Gordon Brown has come under increasing pressure to put more effort into helping Britain's 4.7 million small businesses cope with the effects of the financial crisis.

The FSB welcomed Darling's proposals after revealing that one in three of its 215,000 members were currently finding it difficult to obtain funding and had witnessed a significant increase in the cost of existing finance .

"Everyone has been making the right sounds and been supportive of small businesses, but we need to see action on the ground," a spokeswoman for the organisation said.

"We do not want to see a repeat of the 1990s when 1,000 businesses were closing a week. But without anything being done, we could move in that direction," she added.
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